Expressing satisfaction with 9 per cent GDP growth in 2007-08 despite rise in crude prices and financial turbulence, Finance Minister P Chidambaram exuded confidence that the economy will expand close to 8.5 per cent in the current fiscal.
The government, the minister added, will take corrective steps to address slow down in the manufacturing sector.
"It is a matter of great satisfaction that 2007-08 has returned the growth rate of 9 per cent. As the year progressed there were some doubts whether we will be able to achieve 9 per cent growth rate.
"I had on many occasions expressed my confidence that growth will be close to 9 per cent," Chidambaram told reporters after the release of GDP figures for last fiscal.
Referring to the performance of the manufacturing sector, which declined to 8.8 per cent from 9.4 per cent estimated by the government earlier, he said government will take corrective measures to address industrial slowdown.
"We will address why is there a slowdown in manufacturing. We will have to take some corrective measures... and we will take those corrective measures," the finance minister stressed.
Without elaborating on corrective measures to address the problems of the industry, he said, rising interest rates have not dampened the investment intentions of India Inc.
Describing 8.1 per cent inflation rate as worrisome, Chidambaram said controlling inflation and boosting growth of the manufacturing sector are not conflicting objectives but twin aims of the government.
Chidambaram further said any increase in administered prices of petrol and diesel will fuel inflation in the short term but the same may not necessarily be true in the long term.
He also said there is still scope for cement manufactures to cut prices.
As regards growth, he said: "Despite rise in commodity and oil prices, and financial turbulence and meltdown of some global financial institutions, India has been able to grow at 9 per cent for the third year running."
Following 9 per cent Gross Domestic Product in 2007-08, the average growth rate during the four year of the UPA government would be 8.9 per cent.
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